It seems clear this morning anyone who received FTX-aligned monies is on notice that those monies may be (to make up a term) morally tainted in some fashion. Without attempting to fully delineate moral taint or establish that it exists, I submit that monies generated through fraudulent business practices that caused financial harm to identifiable victims would qualify. And gambling with customer deposits that you had promised not to gamble with would qualify in my book.
In that case, there’s an argument that the monies transferred out of the business (including through insiders or their foundations) should be treated as equitably belonging to the victims, as opposed to belonging to anyone who received the transfers without giving reasonable equivalent value. (Although I am using some legal metaphors, I am attempting to ask a moral rather than legal question in this comment.)
I am wondering how the community feels about the argument that—under some factual scenarios that are looking increasingly likely—some FTX-aligned monies should be returned to the victims under such a theory, irrespective of whether a clawback can legally happen. My initial reaction is that there are some circumstances under which that would need to happen because the monies were never properly the transferor’s to grant away.
To use a more concrete analogy, suppose that my grandmother gives me a car, and I later learn that it was stolen. Do I have a moral obligation to return the car? I would submit that I have such an obligation in some circumstances and not others.
I think anyone who provided reasonably equivalent value for funds received does not need to worry about taint. Next, I suggest that the taint dissipates if a transferee spends or irrevocably commits the transferred funds in good faith and without actual or constructive knowledge of the moral taint. I am not sure whether I think there is also a requirement that the transferee would not have spent or committed the monies absent the donation.
Most fundamentally, I submit that there has to be a sufficient causal and temporal nexus between the source of the taint and the specific monies for the monies to be tainted. So it would generally be morally OK to keep donations from (say) Harvey Weinstein, because his crimes were independent of the genesis of any funds he donated. Also, if the monies were clean at the time of transfer, I would submit that the transferor’s subsequent actions could not taint them. So if FTX was clean until the end, then any transfers it irrevocably committed to charity prior to the onset of any fraud would generally be untainted in my book. They might cause an optics/PR problem, but that’s another story.
All that is to say, however, that there’s a good chance there is significant money out there whose origin story is analogous to Grandma stealing a car and giving it to me under circumstances where I should give the car back.
It seems clear this morning anyone who received FTX-aligned monies is on notice that those monies may be (to make up a term) morally tainted in some fashion. Without attempting to fully delineate moral taint or establish that it exists, I submit that monies generated through fraudulent business practices that caused financial harm to identifiable victims would qualify. And gambling with customer deposits that you had promised not to gamble with would qualify in my book.
In that case, there’s an argument that the monies transferred out of the business (including through insiders or their foundations) should be treated as equitably belonging to the victims, as opposed to belonging to anyone who received the transfers without giving reasonable equivalent value. (Although I am using some legal metaphors, I am attempting to ask a moral rather than legal question in this comment.)
I am wondering how the community feels about the argument that—under some factual scenarios that are looking increasingly likely—some FTX-aligned monies should be returned to the victims under such a theory, irrespective of whether a clawback can legally happen. My initial reaction is that there are some circumstances under which that would need to happen because the monies were never properly the transferor’s to grant away.
To use a more concrete analogy, suppose that my grandmother gives me a car, and I later learn that it was stolen. Do I have a moral obligation to return the car? I would submit that I have such an obligation in some circumstances and not others.
I think anyone who provided reasonably equivalent value for funds received does not need to worry about taint. Next, I suggest that the taint dissipates if a transferee spends or irrevocably commits the transferred funds in good faith and without actual or constructive knowledge of the moral taint. I am not sure whether I think there is also a requirement that the transferee would not have spent or committed the monies absent the donation.
Most fundamentally, I submit that there has to be a sufficient causal and temporal nexus between the source of the taint and the specific monies for the monies to be tainted. So it would generally be morally OK to keep donations from (say) Harvey Weinstein, because his crimes were independent of the genesis of any funds he donated. Also, if the monies were clean at the time of transfer, I would submit that the transferor’s subsequent actions could not taint them. So if FTX was clean until the end, then any transfers it irrevocably committed to charity prior to the onset of any fraud would generally be untainted in my book. They might cause an optics/PR problem, but that’s another story.
All that is to say, however, that there’s a good chance there is significant money out there whose origin story is analogous to Grandma stealing a car and giving it to me under circumstances where I should give the car back.